Taxes and the Wealthy by Randy Smith

As we see and hear all of the political commercials, onething is abundantly clear: The message that is being sent by both sides is nota fair representation of the truth. Oneof the battle cries that I have heard so much for the past eight to 10 years,in fact, so much that I believe most of us have come to accept it as fact, isthat wealthy people are not paying their share of taxes.{} I believe it was as far back as the Clintoncampaign that we began hearing about "tax cuts for the wealthy" that theRepublicans are now known for (whether true or not.)

It is a significant enough of an issue that I decided to doa little research on my own, and I was quite surprised by some of the thingsthat I found.{} I hope you will look atthis with a non-partisan mind and compare just the facts, not the hyperbole.

The first thing I wanted to find out is, how many of theserich fat cats are not paying any taxes?{}We all heard Warren Buffett tell the world that his secretary paid moretaxes than he did, so how many more wealthy tax-dead-beats are there outthere? I Googled it and was a littlesurprised at what I found. Here is theinformation from 2009 (the most recent I could find) as printed by CNNMoney. The title of the article is "47%will pay no federal income tax."{} I haveto tell you, I was more than a little startled by that headline. I was even more startled to find out whowasn't paying. To the left is a figure with the percentage ofthose households NOT paying ANY federal income tax, broken down by householdincome.

Wow! Nearly 70% ofhomes with incomes UNDER $50k pay NO FEDERAL INCOME TAX! Really!? I find that unimaginable, but that's what the report says.

It also states that only 1.5% of those makingover $1 million paid no taxes. Iwould have guessed much higher than that based on what I hear in campaigns, butthose appear to be the facts.

What aboutthe other thing that I hear all the time, you know, the "rich people don't paytheir fair share of taxes"{} OK, that'sbelievable, after all, they do have access to the best accountants to keeptheir taxes down. However, the articlealso states: "Akey reason why there is a zero-liability group at all is because the U.S. taxsystem is progressive. Those who bring in more money pay more than those lowerdown the income scale to support government functions such as national defenseand social safety nets like Medicaid for those in need. That progressivity canbe dialed up or down."

This article is published by CNN and sourced to the TaxPolicy Center, and I don't believe either of them have leanings in favor of thewealthy.{} Here's the entire article ifyou care to read it.{}

Ok, so I am also led to believe that the real tax burden inthe US is placed on the middle class.{} IGoogled that too and was once again, quite surprised at what I found. The higher the income levels, the share ofthe tax burden paid goes up dramatically. In fact, households in the bottom 50% of income paid only 2% of thefederal taxes. That means that 98% ofall of the federal income tax is derived from households that rank in the top50% by income. What is really eyeopening is those {}in the evil "1%" who have been vilified by those in the "99%" actually paid 37% of the US tax burden.{}In fact, those in the top 10 % are responsible for delivering 71% ofthe US taxes.{} Here's that taxchart.{}

OK, so what do they mean when they say "tax cuts for thewealthy?"{} Have the wealthy people inthe US gotten big tax cuts that the rest of us didn't get? Well, when I Googled that, I found that yes,they have gotten some nice tax cuts. In1979 under President Jimmy Carter, the top tax bracket was 70% on income over$1,000,000.{} In 2011, the maximum taxbracket is 35% on income over $379,000. When I hear someone say that people who make over $ 1 million should pay 35% in taxes, it appears to me that they already do.{} Maybe I'm not smart enough to understandthat, but that's what the facts seem to say. If you want to see that article,here it is.{}{}

One other thingthis is ONLY federal income tax.{} It does not take into account state,municipal, sales, property, automobile, capital gains, or any of the othercountless taxes that we all pay.

So, what's the point?{}The point is simple: Don't bepersuaded by all of the hyperbole that you hear during politicalcampaigns. The speech, by both parties,is carefully crafted and practiced to have just enough truth in it to not be acompletely false statement, but it is usually far from the actual truth.